SOLUTION

1. Calculate taxes
Sao Do is producing 2 groups of products: One is NOT subject to SST and another is subject to SST.
Price excluding SCT&VAT + SCT(50%) + VAT(10%)
500 + 0 + 50 = 550
200 + 100 + 30 = 330

Price excluding VAT + Price excluding VAT*10% = Price including VAT

Price excluding VAT*(1+10%) = Price including VAT
Price excluding VAT = Price including VAT/(1+10%)

a) Value added tax

Output VAT = [880/(1+10%)]*10% + 17*10% = 81.7 (mil dong)
Input VAT = (60%*800)*10% + 20*10% = 50 (mil dong)
VAT payables = 81.7 – 50 = 31.7 (mil dong)
b) SCT or SST (Special consumption tax = Special sales tax)
Output SCT = {330/[(1+10%)*(1+50%)]}*50% = 100 (mil dong)

You cannot calculate Deductible Input SCT directly from The amount payable of raw materials
purchases because of two reasons:
1. You do not know how much of 480 mil you used to produce the goods subject to SCT.
2. The amount of deductible input SCT is the amount of SCT of the input which is used to produced the
goods sold.

Deductible Input SCT = 80 (mil dong) (Data number 10)

SCT payable =100 – 80 = 20 (mil dong)

c) Corporate income tax
Profit before tax = [880/(1+10%) – 100] – [(60%*800 -80)+45+21+19+20+(200-110) +1%*200*3
+15%*200*3/12 +3] + (17 – 18) = 87.5 (mil dong)
CIT = 87.5*20% = 17.5 (mil dong)
Why we add Changes in Inventory = (Beginning inventory – Ending inventory) when calculating
COGS?
The above changes in inventory help to eliminate the current direct cost attributable to the production but
did not contribute to the creation of current revenue, or include the previous direct cost attributable to the
production but contributed to the creation of current revenue.
For example: You are a shop who sells laptops.
Beginning inventory: 0
Bough: 100 laptops at 15 mil dong per unit (excluding VAT)
After that, the shop sold 40 laptops at 20 mil dong per unit (excluding VAT)
Ending inventory: (100 – 40)*15 = 60*15
COGS = 100*15 +(0 – 60*15)
It is correct because it is the cost of 40 laptops which were sold.

2. INCOME STATEMENTS OF THE QUARTER 1

1. Sales
Why we eliminate deductible input SCT (NOT SCT amount on the invoice) from The total amount
(Doanh thu)
payable of raw 700
material purchases to domestic suppliers = 880/(1+10%)
excluding - 100
VAT when calculating COGS?
2. Deductions
Because thekhoản
(Các inventory
giảmistrừ
recorded
Doanh by
thu)the price including SCT.
Sales discounts
For example:
(Chiết khấu thương mại)
A producer
Sales imported
rebates 1000 liters of liquor and paying an excise tax (SCT: Special consumption tax)
amount(Giảm giá 40
of VND thousand
hàng bán) per liter upon importation (based on the receipt of excise tax payment at the
stage of importation).
Sales Returns The price including SCT is VND 120 thousand per liter.
(Hàng bán bị trả lại)
+ Beginning inventory: 0
3. Net sales
(Doanhincreased
+ Inventory thu thuần) 700
to 1000*120 = VND 120,000 thousand
4.Costs of goods sold
+ Exwarehousing 400bán)
(Giá vốn hàng liters of liquor to produce 400 bottles
547of liquor.
= (60%*800-80) +45 +12+(200-110)
+ Sold5.400
Gross profit/loss
bottles of liquor.
(Lợi nhuận gộp) 153 = 700 - 547
6.Financial
Ending inventory:
income120,000 thousand dong – 400*120 thousand dong = 72,000 thousand dong
(Doanh thu hoạt động tài chính) 0
+ SCT in the invoice = 40*1000 = 40,000 thousand dong
7. Financial expenses
(Chi phíSCT
+ Deductible tài chính)
= 40*400 = 16,000 thousand dong
In which: Loan interest expenses
Two approaches to calculate
(Trong đó: Chi COGS (ignoring the direct13.5=
phí lãi vay) cost to make the bottles
1%*200*3 of liquor):
+ 15%*200/4
8. Selling
1st approach: COGSexpenses
= [1000*120 - 16,000 + (0 -72,000)] = 32,000 thousand dong
(Chi phí bán hàng) 32.6 = 60%*21+20
9. General
2 approach:
nd
The and
priceadministrative expenses
of one liter of liquor excluding SCT = 120 -40 =80 thousand dong
(Chi phí quản lý doanh nghiệp) 18.4 = 40%*21 + 7+3
COGS = 400*80 = 32,000 thousand dong
10.Net operating profit/loss 88.5 = 153 + 0 - 13.5 – 32.6-18.4
(Lợi nhuận thuần từ hoạt động kinh doanh)
11. Other income
(Thu nhập khác) 17 (Disposal of fixed assets)
12. Other expenses
(Chi phí khác) 18 (Net book value of disposed assets)
13. Other profit/loss
(Lợi nhuận khác) -1 = 17 - 18
14. Profit/loss before tax
(Tổng lợi nhuận kế toán trước thuế) 87.5 = 88.5 -1
15.Corporate income tax
(Thuế thu nhập doanh nghiệp) 17.5
16.Profit/loss after tax
(Lợi nhuận sau thuế) 70 = 87.5-17.5

3. CASH FLOWS OF THE FIRST QUARTER

Items In the quarter

I.Cash inflows from: 546.7 = 528+18.7
352= 40%*880 (Receivables
from customers)
1.Sales 528 = 60%*880 Khoản phải thu khách hàng
2. Disposal of fixed assets 18.7 = 17*(1+10%)
II.Cash outflows from: 425.7
264 (Payables to suppliers)
1. Raw material purchases 264 =(60%*800*1.1)*50% Khoản phải trả người bán
2.Direct costs 45
3.Indirect costs 21
4.Outside purchasing services 22= 20*(1+10%)
2 (Accrued expenses)
5.Short-term loan interest 4 = 1%*200*2 Chi phí phải trả
7.5 (Prepaid expenses)
6.Long-term loan interest 15 =15%*200/2 Chi phí trả trước
7. Pay VAT 31.7
8. Pay SCT 20
17.5 (Payables to state budgets)
Thuế và các khoản phải nộp ngân sách
9.CIT nhà nước
10.Other taxes 3
Increases/Decreases in cash 121 = 546.7-425.7
Beginning cash and cash equivalents 310
Ending cash and cash equivalents 431 =310 + 121

4. BALANCE SHEET

ASSETS Beginning Ending balance

A. SHORT-TERM ASSETS
I. Cash and cash equivalents 310 431
III. Accounts receivable
1. Receivable from customers 110 462=110+352
IV.Inventories 200 110
V. Other current assets
1. Short-term prepaid expenses 7.5
B.LONG TERM ASSETS
II. Fixed assets
1. Tangible fixed asset
Historical costs 800 750=800-50
Accumulated depreciation (100) (87) = -[100 +19 – (50-18)]
TOTAL ASSETS 1320 1673.5
LIABILITIES AND OWNERS' EQUITY
A.LIABILITIES
I. Current liabilities
1.Short-term debts and loans 200 200
2. Payable to suppliers 120 384=120+264
4. Taxes and other obligations to the State Budget 17.5
6. Accrued expenses 2
II. Long-term liabilities
4. Long-term debts and loans 200 200
B.OWNERS' EQUITY
I.Basic owners' equity
1.Capital 800 800
10.Retained earnings 70
TOTAL LIABILITIES AND OWNERS' EQUITY 1320 1673.5